Financial sector news

The European Bank for Reconstruction and Development (EBRD) has lowered its forecast for Ukraine's gross domestic product (GDP) growth in 2025 to 3.3%, although in February it expected growth of 3.5%. This is stated in the bank's report.

At the same time, the EBRD confirmed its forecast for 2026 at 5.0%, provided that Russia's war against Ukraine ends and post-war recovery begins.

"Global trade pressures and the war are affecting economic expectations for 2025. Ukraine's GDP growth is expected to slow to 3.3% in 2025, and recent global trade disputes will add additional risks to the already high uncertainty associated with Russia's war against Ukraine," the bank said in a statement.

It is noted that stable external financing from the EU under the Ukraine Facility program and proceeds from frozen Russian ERA assets provided by the G7 countries will fully cover external and fiscal deficits in 2025, supporting macroeconomic stability.

Strong stimulus from government consumption and increased military procurement from domestic industry are expected to support economic growth.

At the same time, the bank noted that since mid-2024, economic growth has slowed and inflation has accelerated due to the impact of the war that began with the Russian invasion in February 2022.

GDP growth in 2024 slowed significantly from over 5.0% in the first half of the year to around 2.0% in the second half, bringing the overall figure down to 2.9%.

Among the reasons are electricity shortages due to Russian attacks, low harvests, and an acute labor shortage in the economy caused by war-related needs.